Sign in

    Booking Holdings Inc (BKNG)

    Business Description

    Booking Holdings Inc. is a leading provider of online travel and related services, operating primarily through its five consumer-facing brands: Booking.com, Priceline, Agoda, KAYAK, and OpenTable. The company offers a wide range of services, including accommodation reservations, flights, rental cars, restaurant reservations, and vacation packages . Revenue is primarily generated from online travel reservation services, categorized into merchant and agency revenues, with a significant portion coming from Booking.com's accommodation reservations . In 2023, the company reported significant milestones, including over 1 billion room nights booked and record gross bookings .

    1. Accommodation Reservations - Facilitates online booking of accommodations, primarily through Booking.com, contributing significantly to both merchant and agency revenues.
    2. Flights - Offers online flight booking services through its brands, providing travelers with a range of options for air travel.
    3. Rental Cars - Provides rental car booking services, allowing customers to reserve vehicles for their travel needs.
    4. Restaurant Reservations - Operates through OpenTable, offering restaurant reservation and management services.
    5. Vacation Packages - Combines various travel services into packages, offering convenience and value to travelers.
    6. Advertising and Referral Services - Generates revenue through KAYAK's referral and advertising services, enhancing visibility for travel-related businesses.

    Q3 2024 Summary

    Initial Price$3977.35July 1, 2024
    Final Price$4100.99October 1, 2024
    Price Change$123.64
    % Change+3.11%

    What went well

    • Strategic Investments in AI and GenAI Position Booking Holdings Ahead of Competitors: Booking Holdings is leveraging its significant resources, data, and AI expertise to develop generative AI technologies across its brands. This enhances customer experiences, drives operational efficiency, and provides a competitive advantage over hotels and other competitors that lack similar resources. , ,
    • Strong Growth in Alternative Accommodations and Flights Boosts Diversification: The company's alternative accommodations segment grew 14% in Q3, outpacing the overall business, with alternative accommodations representing 35% of Booking.com's room nights. Additionally, air tickets booked on their platforms increased 39% year-over-year, accelerating from Q2's growth of 28%, indicating successful expansion into new verticals and strengthening their connected trip vision. ,
    • Optimistic Outlook and Growth in Asia Market: Booking Holdings is optimistic about its long-term outlook in Asia, aiming to grow faster than the high single-digit growth projected for the region over the next five years. Operating two complementary brands, Agoda and Booking.com, over the last 12 months, about 24% of global room nights were booked by bookers in Asia, slightly higher than pre-pandemic levels, highlighting their strong position and growth potential in this important market.

    What went wrong

    • Challenges in the U.S. Market: Booking Holdings acknowledges that it is a "challenger" in the U.S. market and admits that their platform is "not as easy yet as some of our competitors" for property managers, indicating potential difficulties in gaining market share in this key region.
    • Uncertainty in AI Investments' Financial Impact: The company has made significant investments in AI but admits that it's "difficult at this time" to translate these investments into measurable financial benefits, creating uncertainty about the return on these investments.
    • Limited Impact from Asian Partnerships: Partnerships with super apps in Asia, such as Grab, are "not something that is... influencing our Asia numbers at all", suggesting that these strategic initiatives are not driving growth as expected.

    Q&A Summary

    1. Impact of AI on Financials
      Q: How will AI translate to financials?
      A: Management is excited about AI being transformational but it's difficult to quantify its financial impact at this time because it's still early. They expect companies successful in AI to be the long-term winners.

    2. Q4 Bookings Outlook
      Q: What factors affect Q4 bookings?
      A: They expect robust Q4 bookings with continuation of recent trends. Easier comps due to last year's Middle East conflict will help. Events don't significantly impact results, and while the booking window may be less expanded, they've considered geopolitical risks in their outlook.

    3. Marketing Efficiency and ROI
      Q: How is marketing ROI improving?
      A: Through continuous optimization, they've achieved higher growth with higher ROIs. Marketing leverage is expected to continue due to growth of direct channels. Merchandising as a percentage of gross bookings is expected to be flat compared to last year.

    4. Fixed Cost Investments
      Q: How will fixed investments impact margins longer term?
      A: They see significant opportunities for efficiencies and operating leverage. Headcount growth slowed to 3%, down from 13% a year ago. AI offers efficiency opportunities, and they continue to invest in growth areas like flights (up 39%), fintech, and geographical expansion.

    5. Alternative Accommodations Growth
      Q: What's the outlook for AA mix and growth?
      A: Alternative Accommodation listings grew 10% to 7.9 million, with room nights up 14%. They see significant opportunity, especially in the U.S., and are focused on expanding inventory to meet customer needs.

    6. Europe Growth Reacceleration
      Q: What's driving Europe's outperformance?
      A: They've seen reacceleration in Europe since August, with underlying improvement in demand. Their strong platform, with many options and an expanded booking window, contributed to the growth.

    7. U.S. Brand and Market Share
      Q: How is the U.S. business performing?
      A: Brand awareness is improving but not yet where they’d like it to be. Growth is stable, characterized as low to mid-single digits. They're investing in marketing, like the baseball playoffs, and working to simplify the platform for property managers.

    8. Incrementality of AA Volume
      Q: Is AA attracting new customers?
      A: Management believes AA is bringing in customers who wouldn’t have come otherwise, especially in Europe. They emphasize offering all travel aspects in their connected trip vision to attract travelers seeking better service.

    9. Social Media Advertising
      Q: Why is social media marketing now effective?
      A: They're seeing good results from social platforms due to collaboration and creative approaches. Although spend is still relatively small, AI is enhancing ad effectiveness, and a meaningful part of the increased marketing spend is going to social channels.

    10. Asia Growth Drivers
      Q: What's behind Asia's strong performance?
      A: They're pleased with growth, benefiting from market recovery and their own efforts. The Agoda team has localized services, catering to preferences in payment methods and inventory, contributing to success in the region.

    Key Metrics

    View all financials →
    Revenue by Segment - in Millions of USDFY 2013Q1 2014Q2 2014Q3 2014Q4 2014FY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024
    Merchant Revenues1,7522,7703,9452,46910,9362,3883,4464,972
    Agency Revenues1,7822,4293,1352,0689,4141,7632,1442,753
    Advertising and Other2442632612471,015264269269
    Total Revenue3,7785,4627,3414,78421,3654,4155,8597,994
    Revenue by Geography - in Millions of USDFY 2013Q1 2014Q2 2014Q3 2014Q4 2014FY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024
    United States5236156335562,327557638662
    Outside of the U.S.2,8594,8476,1275,20519,0383,3394,4636,614
    - The Netherlands3964,34058111,69717,014519758718
    - Other3,778507--2,0242,820--
    Total Revenue3,7785,4627,3414,78421,3654,4155,8597,994
    KPIs - Metric / QuarterFY 2013Q1 2014Q2 2014Q3 2014Q4 2014FY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024
    **Room Nights (millions)**274268276231-300287299
    **Rental Car Days (millions)**19202015-212223
    **Airline Tickets (millions)**8-99-111113
    **Mix of Room Nights Booked on Mobile App (%)**45+485153-5153Mid-50s
    **Global ADRs Change (%)**+9+5+4+4-+1-1-1
    **Mix of Gross Bookings on Merchant Basis (%)**51535658-596265

    Executive Team

    NamePositionStart DateShort Bio
    Glenn D. FogelPresident and Chief Executive OfficerJanuary 2017Glenn D. Fogel has been serving as the President and Chief Executive Officer of Booking Holdings Inc. since January 2017. He also became CEO of Booking.com in June 2019. He joined the company in February 2000 .
    Ewout SteenbergenExecutive Vice President and Chief Financial OfficerMarch 15, 2024 (future)Ewout Steenbergen is the Executive Vice President and Chief Financial Officer of Booking Holdings Inc., having assumed the role on March 15, 2024. He previously served as EVP and CFO at S&P Global Inc. from 2016 .
    Peter J. MillonesExecutive Vice President and General CounselJanuary 2001Peter J. Millones has been with Booking Holdings Inc. since 2001, serving as the Executive Vice President and General Counsel. He became General Counsel in January 2001 and was appointed EVP in April 2003 .
    Paulo PisanoChief Human Resources OfficerAugust 1, 2021Paulo Pisano has served as the Chief Human Resources Officer at Booking Holdings since August 1, 2021. He also holds the position of Senior Vice President and Chief People Officer at Booking.com since March 2020 .
    David I. GouldenExecutive Vice President of FinanceMarch 1, 2018David I. Goulden served as the EVP and CFO of Booking Holdings Inc. from March 1, 2018, until his retirement from the CFO position in March 2024. He transitioned to EVP of Finance, serving full-time until May 31, 2024, and part-time thereafter .

    Questions to Ask Management

    1. With growth in the U.S. market described as low single digits and feedback from property managers indicating your platform is more complex than competitors', what specific actions are you taking to simplify your platform for property managers and accelerate growth in the U.S. market?
    2. As alternative accommodations grow 14% in Q3, how are you ensuring that this growth is truly incremental rather than cannibalizing hotel bookings, and what strategies are you implementing to attract new customer cohorts specifically seeking alternative accommodations?
    3. Given that social media marketing investments are still a relatively small part of your budget and scaling ROI has been challenging in the past, what strategies are you now employing to sustainably scale your social media marketing efforts while maintaining or improving ROI?
    4. While you've identified opportunities for operating leverage through managing fixed expenses and leveraging AI, you also mention the need to reinvest in growth initiatives; how do you plan to balance these priorities, and should we expect fixed OpEx to grow slower than revenue over the long term to drive margin expansion?
    5. Regarding the $365 million accrual related to potential settlement of Italian indirect tax matters, can you provide more details on the issue, its potential impact on future earnings, and how you're addressing regulatory risks to prevent significant unexpected expenses moving forward?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateFebruary 23, 2023
    End Date/DurationEnd of 2026
    Total additional amount$20 billion
    Remaining authorization amount$8.8 billion (as of September 30, 2024)
    DetailsFor general corporate purposes, including repurchasing shares and satisfying employee withholding tax obligations related to stock-based compensation.

    Past Guidance

    Q3 2024 Earnings Call

    • Issued Period: Q3 2024
    • Guided Period: Q4 2024 and FY 2024

    Guidance:

    1. Q4 2024:

      • Room Night Growth: 6% to 8% .
      • Gross Bookings Growth: 7% to 9% .
      • Constant Currency Accommodation ADRs: Approximately flat year-over-year .
      • Revenue Growth: 7% to 9% .
      • Adjusted EBITDA: $1.6 billion to $1.65 billion .
      • Marketing Leverage: Expected to continue .

    2. FY 2024:

      • Gross Bookings Increase: About 8% .
      • Revenue Growth: Just below 10% .
      • Impact from FX Changes: Slightly negative impact .
      • Fixed Operating Expenses Growth: Around 10% .
      • Adjusted EBITDA Growth: 13% to 14% .
      • Adjusted EBITDA Margins: Expand by more than 1 percentage point .
      • Adjusted EPS Growth: High teens .

    Q2 2024 Earnings Call

    • Issued Period: Q2 2024
    • Guided Period: Q3 2024 and FY 2024

    Guidance:

    1. Q3 2024:

      • Room Night Growth: 3% to 5% .
      • Gross Bookings Growth: 2% to 4% .
      • Revenue Growth: 2% to 4% .
      • Adjusted EBITDA: $3.25 billion to $3.35 billion .

    2. FY 2024:

      • Gross Bookings Growth: Faster than 6% .
      • Revenue Growth: More than 7% .
      • Adjusted EBITDA Growth: High single digits .
      • Adjusted EBITDA Margins: Expand by less than 8 percentage points .
      • Adjusted EPS Growth: Above 15% .
      • Fixed Operating Expense Growth: Low double digits .

    Q1 2024 Earnings Call

    • Issued Period: Q1 2024
    • Guided Period: Q2 2024

    Guidance:

    1. Q2 2024:
      • Revenue Growth: 4% to 6% .
      • Adjusted EBITDA: $1.7 billion to $1.75 billion .
      • Room Night Growth: 4% to 6% .
      • Gross Bookings Growth: 3% to 5% .
      • Marketing Expense: Slight deleverage .
      • Sales and Other Expenses: Grow faster than revenue .
      • Fixed Operating Expenses: Grow faster than revenue .

    Q4 2023 Earnings Call

    • Issued Period: Q4 2023
    • Guided Period: Q1 2024 and FY 2024

    Guidance:

    1. Q1 2024:

      • Room Night Growth: 4% to 6% .
      • Gross Bookings Growth: 5% to 7% .
      • Revenue Growth: 11% to 13% .
      • Adjusted EBITDA: $680 million to $720 million .

    2. FY 2024:

      • Growth: Slightly faster than 7% .
      • Revenue Growth: Similar rate to gross earnings growth .
      • Adjusted EBITDA Growth: Slightly faster than revenue .
      • Adjusted EBITDA Margins: Expand by less than a percentage point .
      • EPS Growth: Above 40% .

    Competitors

    Competitors mentioned in the company's latest 10K filing.

    • Airbnb - Competes directly with Booking Holdings' accommodations businesses .
    • Vrbo (owned by Expedia) - Competes directly with Booking Holdings' accommodations businesses .
    • Google - Competes with Kayak by showing its own meta-search results at the top of its organic search results and offers its meta-search services free to travel service providers .
    • Meta-search services - Compete directly with Booking Holdings for customers by aggregating travel search results .
    • Large online companies - Including those in search, social networking, marketplace, artificial intelligence, and ride-sharing .
    • Travel service providers - Such as accommodations, rental car companies, or airlines, which may offer lower prices on their direct channel than they provide to Booking Holdings .
    • Traditional travel agencies, travel management companies, wholesalers, and tour operators - Compete with Booking Holdings in the travel services market .
    • Companies offering technology services and software solutions to travel service providers - Including large global distribution systems (GDSs) and hospitality software and payments platforms .

    Latest news

    Recent developments and announcements about BKNG.

    Corporate Leadership

      Leadership Change

      ·
      Dec 18, 2024, 9:55 PM

      David I. Goulden is leaving his role as Chief Financial Officer at Booking Holdings Inc. He will transition to a part-time role as Executive Vice President of Finance from January 1, 2025, to March 31, 2025. During this period, he will receive a base salary of $315,000 annually. His equity awards will not vest after this period .